Pos M'sia to grow profitable courier and logistics segment

Pos Malaysia Bhd is looking to grow its profitable courier and logistics segment by leveraging on its numerous Pos Laju centres and extract further synergies from the Kuala Lumpur Airport services (KLAS). KLAS is a wholly-owned subsidiary of DRB-Hicom and Pos Malaysia to create an efficient workflow of logistics management services. "The group is also strengthening its retail segment, making it a one-stop solution centre, especially with the growth of its Islamic pawnbroking (Ar-Rahnu) business," Kenanga Research said in a statement today. For the first quarter of 2014, the postal services company in Malaysia had posted a net profit of RM43.7 million, which came within expectations of the research house. It said looking ahead, Pos Malaysia is staying on course in implementing and delivering its five-year strategic plan, an efficient and effective foundation that will provide the company with both the strength and stability to support revenue diversification in line with best practices of other successful postal organisations. Kenanga Research changed its discounted cashflow based on target price from RM4.90 to RM5.39. Meanwhile, HwangDBS Vickers Research has maintained its "buy" call on Pos Malaysia, with a target price of RM5.60. "We believe Pos Malaysia will continue to extract more synergies from DRB-Hicom and its group of companies which could translate to potentially higher earnings for it," the research house said.